Chile Escondida 9Mo Copper Output Drops 21% To 788,126 Tons

Escondida, the world's largest copper mine, located in northern Chile, produced 788,126 metric tons of copper in the first nine months of 2009, down 21% from 997,001 tons in the same period last year, the mining company said Thursday.

The drop was a result of lower production of concentrate due to falling ore grades at the mine, hard ore that cut down on copper recovery and production problems associated with one of the SAG (semi-autogenous grinding) mills at its Laguna Seca concentrator plant, Escondida said in a statement.

During the nine-month period, Escondida produced 540,740 tons of copper contained in concentrates and 247,386 tons of copper cathodes. Concentrate production fell 33.5% on the year, while that of cathodes, large sheets of 99.99% pure copper, jumped 34%.

The higher cathode output was due to improved recovery and an increase in the level of activity and ore accumulation at the processed stockpiles.

In the first three quarters of the year, Escondida posted a net profit of $1.73 billion, down 56.8% on the year, on sales of $4.12 billion, which were 46.4% lower than in January-September period in 2008.

In the first nine months of this year, the average price per pound of copper on the London Metals Exchange was $2.11, down from $3.61/lb recorded for the same period in 2008.

Escondida is controlled and operated by diversified global miner BHP Billiton Ltd. (BHP, BHP.AU), which has a 57.5% stake. Anglo-Australian mining company Rio Tinto PLC (RTP, RIO.LN) holds 30% of Escondida, with an additional 10% held by a Japanese consortium led by Mitsubishi Corp. (MSBHY, 8058.TO), and the remaining 2.5% by International Finance Corp., the private-sector unit of the World Bank.

-By Carolina Pica, Dow Jones Newswires; 56-2-820-4244; [e-mail]